TEITELBAUM v. CHATER

In this appeal from the final decision of the Social Security Administration denying plaintiff's request for disability insurance benefits under Title II of the Social Security Act, the court is called upon to interpret the meaning of new legislation; the Senior Citizen's Right to Work Act of 1996, Pub. L. No. 104-121, 110 Stat. 847-57 (1996) ("Right to Work Act"), which eliminates the right to receive disability benefits based on alcoholism and drug addiction. The question in this case is the extent to which Congress intended the Act to apply to actions such as the present one, where the alleged disability occurred, and the Commissioner has made a final determination that the plaintiff is not entitled to benefits, prior to the effective date of this Act, but the plaintiff has appealed that decision to the judiciary. In a report and recommendation, the Magistrate Judge assigned to this case concluded that the Act applies retroactively to this case and therefore recommended that this court grant summary judgment in favor of the Commissioner. Because this court does not believe that the Right to Work Act was intended to bar recovery of disability benefits for disability occurring prior to March 29, 1996, the effective date of the Act, the court will decline to adopt the Magistrate Judge's recommendation, and remand the case for further proceedings.

Teitelbaum sought judicial review of the final administrative decision to deny benefits pursuant to 42 U.S.C. § 405(g) by filing a complaint on November 22, 1995. The parties filed cross motions for summary judgment, and this court referred the matter to a Magistrate Judge for a report and recommendation. Finding that the Right to Work Act barred plaintiff's request for relief and applied retroactively under the facts of this case, the Magistrate Judge recommended to this court that it grant the Commissioner's motion for summary judgment.

DISCUSSION

The basis upon which the Magistrate Judge rested his recommendation to grant the Commissioner's motion for summary judgment was that recent amendments to the Social Security Act make it impossible for the plaintiff to recover the benefits she seeks. The natural starting point, therefore, is the text of these amendments.

Section 105(a)(1)(C) of the Right to Work Act provides, in relevant part, that:

An individual shall not be considered to be disabled for purposes of this title if alcoholism or drug addiction would (but for this subparagraph) be a contributing factor material to the Commissioner's determination that the individual is disabled.

Rather, the key dispute in this case is whether these amendments apply to the plaintiff's case. The effective date of this act is March 29, 1996. The effective date provision of the statute provides, in relevant part:

The amendments . . . apply to any individual who applies for, or whose claim is finally adjudicated by the Commissioner of Social Security with respect to, benefits under title II of the Social Security Act based on disability on or after the date of the enactment of this Act, and, in the case of any individual who has applied for, and whose claim has been finally adjudicated by the Commissioner with respect to, such benefits before such date of enactment, such amendments shall apply only with respect to such benefits for months beginning on or after January 1, 1997.

§ 105(a)(5)(A), 110 Stat. at 853.

This cryptic language has spawned considerable debate and disagreement among the few courts to have considered the application of the statute. There appear to be two plausible interpretations of this statutory language. The first approach would apply the alcoholism and drug addiction provision to all claimants who receive adjudication after the effective date of the amendments, regardless of the months for which they seek disability payments, by reading the words "on or after the date of the enactment of this Act" as modifying "applied for" and "finally adjudicated with respect to." The court will refer to this approach as the "adjudication interpretation." The second approach would apply the provision to claims for disability which accrue after the effective date of the amendments by reading the words "on or after the date of the enactment of this Act" in the first clause of the statute as modifying "disability." The court will refer to this approach as the "disability interpretation." The court believes that the "disability interpretation" is the interpretation intended by Congress.

Under the adjudication interpretation, the statute is read as applying to any individual "whose claim is finally adjudicated . . . on or after the date of the enactment" of the amendments. Thus, the statute would divide all claimants, regardless of the dates upon which their claims for disability rest, into two groups: those who have received a final adjudication by the Commissioner before March 29, 1996, and those who have not received a final adjudication before March 29, 1996. The new amendments would apply to the latter, who would be entitled to no benefits whatsoever; including benefits based on periods of disability occurring before March 29, 1996. The former group would be entitled to receive benefits only until January 1, 1997. Most courts which have interpreted the new statute have followed this approach, see Santos v. Chater, 942 F. Supp. 57, 1996 WL 566365 at *7 (D. Mass. 1996) ("the statute divides persons suffering from alcohol or drug addiction into two groups"); Willis v. Chater, 939 F. Supp. 1236, 1996 WL 534940 at *3- *5 (W.D. Va. 1996); Sousa v. Chater, 945 F. Supp. 1312, 1996 U.S. Dist. LEXIS 16679, 1996 WL 651359 at *14-*16 (E.D. Cal. 1996); Armstrong v. Chater, 949 F. Supp. 808, Civ. No. 95-1709, 1996 WL 467310 at *2 (W.D. Ok. Jun. 20, 1996) ("In setting differing dates as to when the Amendments are to be effective, Congress distinguished between two groups of individuals . . . .").

Under this reading of the statute, the crucial issue in determining whether the plaintiff may receive any disability benefits for alcoholism or drug addiction focuses on the date the plaintiff received a final adjudication. In this case, therefore, the question would be when plaintiff's case is "finally adjudicated" if the Commissioner makes a final decision before March 29, 1996 denying benefits, the plaintiff seeks judicial review and is successful, but no final judicial decision is made before March 29, 1996.

Of the courts which have followed the adjudication interpretation of the statute, some courts have found the Commissioner's decision is not final if that decision is appealed to the judicial system and thus denied relief for all disability benefits based on alcoholism or drug addiction. See Armstrong, 949 F. Supp. 808, 1996 WL 467310 at *2 ("This court concludes that the construction most consistent with the congressional intent embodied in the Amendments is that in referring to 'any individual . . . whose claim is finally adjudicated by the Commissioner of Social Security with respect to [disability] benefits . . . on or after the date of enactment' . . . Congress included not only those individuals with denied claims pending at the various administrative levels of review but also those, such as the Plaintiff here, with denied claims pending appeal in the Federal Courts."); Sousa, 945 F. Supp. 1312, 1996 U.S. Dist. LEXIS 16679, 1996 WL 651359 at *14- *16. Other courts have concluded that "'finally adjudicated by the Commissioner' means 'finally adjudicated by the Commissioner '" Santos, 945 F. Supp. 1312, 1996 WL 566365 at *8 (emphasis added), and that when the Commissioner makes a ...

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